Trade On An Upswing, But Potential Remains Untapped

Posted on Wednesday, September 07 at 20:20 by jensonj
Even on the investment front, while EU is Indiaís largest source of foreign direct investment (FDI), it receives only 0.2% of EUís FDI. Interestingly, compared to FDI approvals from EU countries worth $17.14 billion between April 1991 to March 2005, actual inflow from EU countries was just $7.04 billion during the period. Therefore, there exists a lot of scope of enhancing FDI inflow by ensuring that more approvals result in actual investments. Realising the potential of enhanced economic cooperation, the EU decided to upgrade its relationship with India to the level of strategic partnership, which got endorsed at the 5th India-EU summit in The Hague last year. The importance of the development could be gauged from the fact that only five other countries which include US, Canada, Russia, Japan and China have strategic partnership with EU so far. India-EU economic relationships is spread over a fairly large area. The areas include textiles, health and family welfare, maritime transport and science and technology. There is also an agreement on sugarcane under which EU has undertaken to purchase and import at guaranteed prices a specific quantity of raw or white sugarcane originating from India. The prices are set on a yearly basis. Both sides signed a customs cooperation agreement on 28 April, 2004. The agreement entails cooperation between the parties with the objective of making customs procedures less complex and developing trade facilitation in matters pertaining to customs in accordance with international standards. It also sets up mechanisms of mutual administrative assistance for exchanging information and carrying out inquiries, with a view to counter fraud against respective customs legislation. Other recent bilateral agreements signed by the two sides include bilateral investment protection agreements, which happened after EU membership expanded to 25. India has also signed double taxation avoidance agreements (DTAAs) with 18 of the 25 EU member states. Negotiations for signing DTAAs with Lithuania, Estonia, Latvia, Slovakia and Slovenia are now in advanced stages. http://www.financialexpress.com/fe_full_story.php?content_id=101727

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